 Do You REALLY want this guy representing Your company?
"Chances are that you’ve entered our industry since the correction of August 1998; that was a major turning point in how Loan Officers were paid thereafter. Previously they were salaried with ‘modest’ bonuses from time to time, and they were loan analysts as they should be, just as the public perceived them to be. As ‘Big Commissions’ subsequently became the norm, they saw themselves as sales experts - closers, and regrettably not conscious ethical customer service personnel.
The longer version of that is employers – lenders and mortgage brokers who employ them, have given big cash rewards to them … an activity that has become all too common in this industry these past years.
Our latest lesson is all about a reversal of that foolish method of operating your business. You need to properly advertise and market your business to attract customers; as they come to you via phone, walk in your office or visit your website due to your advertising investment dollars spent, you’ll no longer need a ‘Loan Officer’ (and the big commissions that go hand in hand with them) to handle them – THAT’S how this industry operated the first three decades I was in operations ... so … hire yourself a brand new inexperienced green-pea ‘processor’ and show her this!"
This is the INTRO to our most recently published interactive training lesson (it's immediately available at the bottom of THIS page). And, given the ethical and supervision issues that have to do with so many of them; in addition to saving yourself many tens of thousands of dollars a year, that's why it's smart to get rid of your Big Commissioned LO's - this lesson trains your utlity people to take their place!
Massive Foreclosure Plan Unveiled
The Homeowner Affordability and Stability Plan (HASP) was announced by the U.S. Department of the Treasury. HASP starts on March 4, at which point details about eligibility will made available. The Treasury indicated that 4 million to 5 million borrowers with LTVs between 80 and 105 percent who have made on-time payments on loans managed by either Fannie Mae or Freddie Mac will be able to re-fi at today's lower rates. In addition, the plan includes a $75 billion initiative to support modifications that lower mortgage payments for between 3 million and 4 million at-risk borrowers primarily with subprime and exotic loans. Not just a news summary - HERE's the actual fine print! Take the time and actually carefully read this, that way you won't be just standing there and saying ... HUH? ... and no, this is not about a big wind-fall bonanza for you, it's all about the customers.
NAMB Sues FHFA Over New Appraisal Rule
The National Association of Mortgage Brokers has filed suit against the Federal Housing Finance Agency to block implementation of a new GSE appraisal rule, claiming it could put brokers out of business and allow appraisal management firms to profit at the expense of independent appraisers and consumers. The new 'Home Valuation Code of Conduct,' which goes into effect May 1, prohibits loan officers and mortgage brokers from directly ordering appraisals. NAMB claims the code has a "bias toward mortgage lenders" and that major banks are already requiring brokers to order appraisals through their affiliated appraisal management companies. The trade groups says the new code of conduct is a result of an investigation led by New York Attorney General Andrew Cuomo into the relationship between an appraisal management company (AMC) and the now defunct Washington Mutual, which sold mortgages to Fannie Mae and Freddie Mac. "Although the WaMu lawsuit ostensibly related to how WaMu's relationship with its AMC generated fraudulent appraisals and contributed to WaMu's financial demise, the resulting agreements focused on mortgage brokers, which had nothing to do with the claims alleged in the WaMu lawsuit," NAMB says. The new appraisal code stems from a GSE/FHFA settlement with the New York AG. The valuation code's "abolition on broker-ordered appraisals will force mortgage brokers and customers to rely on lenders and their affiliates for home value appraisals, disrupting the established business practices of mortgage brokers, decreasing the efficiency of the marketplace and increasing the costs to consumers," NAMB says.
White House Stands Behind New RESPA Rule
The Obama administration is still standing behind a Real Estate Settlement Procedures Act rule and urged a U.S. district court to dismiss a legal challenge to the rule with "prejudice." Department of Justice attorneys did not present a defense or any praise of the RESPA rule, which the National Association of Mortgage Brokers claims in a lawsuit would place brokers at a "permanent disadvantage in the marketplace." Opponents of the RESPA rule noted that the DOJ response was expected and the new administration still has time to reconsider its position, since the main provisions of the final rule do not go into effect until January 10, 2010. "We hope the new administration will pull back the RESPA rule as they are doing with other regulations that were put into effect by the Bush administration after the election," said Matt Dolan, a NAMB consultant with the Federal Policy Group. The Department of Housing and Urban Development issued the RESPA rule in November. It requires lenders to provide a standardized and expanded good faith estimate disclosure to borrowers shortly after they file a mortgage action. The GFE includes a disclosure of the mortgage broker's compensation, which NAMB claims is unfair since other originators don't have to disclose their compensation.
2009 Conforming Loan Limits Increaded by ARRA
The American Recovery and Reinvestment Act (ARRA), which
was signed into law on Tuesday, increased the maximum conforming loan limit for mortgages originated in 2009. The increase affects 250 counties across the United States. For these areas, identified in the attached table, Fannie Mae and Freddie Mac loan limits will return to their late-2008 levels, which were up to $729,750 for one-unit properties in the continental United States. Loan limits in other areas are not changed by the legislation.
Conforming loan limits for 2009 were originally announced in late 2008 and had been calculated under terms set forth in the Housing and Economic Recovery Act of 2008 (HERA), passed in July. The new ARRA legislation stipulates that, for loans originated in 2009, the loan limit is to be the higher of the 2008 limits and those originally calculated for 2009 under HERA. Where the 2008 and 2009 limits differ, the 2008 limits tend to be higher and thus, in most cases, loan limits are reverting back to last year’s levels. For the relatively few counties where 2009 limits actually increased (43 counties in Virginia, North Carolina, and California), the new limits will remain at the higher level.
Notable elements of the new legislation:
1. The Director of FHFA is given the authority to increase loan limits levels for “subareas” under provisions in ARRA. Given the implementation difficulties associated with establishing multiple limits for any given county, FHFA’s Director currently has no plans to use this discretion.
2. The loan limits established under ARRA apply to all loans originated in 2009. For loans purchased in 2009 that were originated from July 1, 2007 through December 31, 2008, the same limits will apply. For loans purchased in 2009, but originated before July 1, 2007, the limits previously announced by FHFA on November 7, 2009 and updated in December will apply. For example, a $700,000 mortgage originated in 2006 would not be eligible for purchase this year, even if the applicable local limit under ARRA is $729,750.
Several lookup tables are available HERE that provide detailed information about local area loan limits. A full county listing is provided showing loan limits for every U.S. county and county-equivalent. Also provided is a table showing those metropolitan areas where the new 2009 loan limits exceed the baseline $417,000 level for one-unit properties.
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